Circulars/Notifications - Banking Inspection Department  

 Circular Letter No. 1/2002

Octobar 9, 2002 


The Presidents/ Chief Executives 

All Banks/NBFIs.

Dear Sirs/Madam,   

CONFIDENTIALITY / SECRECY OF SBP INSPECTION REPORTS-VIOLATION OF

            

Your attention is drawn to para 46A of the State Bank of Pakistan Act, 1956 as amended from time to time that reads as under: -

Production of unpublished record of bank, etc.

(1) No court tribunal or other authority shall be entitled to compel the bank or any person in the service of the bank to produce or, as the case may be, give any evidence derived from, any unpublished record of the bank.

(2) No court, tribunal or other authority shall permit any one to produce or give evidence derived from, any unpublished record of the Bank, except with the prior permission in writing of the Governor who may give or withhold such permission as he thinks fit.

(3) Notwithstanding anything contained in this Act or any other law for the time being in force, a report prepared by the Bank on a banking company under Section 40 of the Banking Companies Ordinance, 1962 (LVII of 1962), shall be deemed to be unpublished for the purposes of sub-section (1) and (2) even if a copy of such report has been supplied to the banking company to which the report pertains or to the Federal Government or to the Pakistan Banking Council constituted under Section 9 of the Banks (Nationalization) Act, 1974 (Act XIX of 1974).”

2. In this regard, the preamble to the on-site inspection reports of banks and financial institutions conducted by SBP under Section 40 of the Banking Companies Ordinance, 1962, also stipulates as follows: -

”This report is the property of the State Bank of Pakistan for use in its supervisory responsibilities. This report is furnished to the inspected bank for its confidential use. This report is strictly confidential, and the State Bank of Pakistan forbids its disclosure in any manner without its prior permission. Under no circumstances should the bank or any of its board members, directors, officers, or staff discloses or make public in any manner this report or any portion thereof.” 

3. However, it has been observed lately that some of the banks to whom the inspection reports or their drafts were dispatched in a sealed cover by the State Bank are not meticulously complying with these instructions. Instances have come to notice where some of the banks have not been able to maintain confidentiality with respect to the contents of the inspection reports and unauthorized employees have succeeded in breaching the secrecy/confidentiality thereof with serious implications. 

4. In order to effectively check recurrence of such instances and ensure that the access to the contents of the inspection reports is strictly limited to the authorized persons/executives/officers of the banks only, you are advised to devise and put in place an effective and foolproof system in this regard at the earliest under intimation to the undersigned. 

Please acknowledge receipt.

 

Yours faithfully,
(Kazi Abdul Muktadir)
Director
       
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